Spotify’s Move to U.S. Could Spur iTunes Subscription Service

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Spotify is a huge hit in Europe, where it provides ad-supported, free streaming music via desktop application. The software comes in three flavors for Linux, Windows and OS X, and it’s attracted roughly 7 million users since its launch in 2006. Spotify is now in the process of trying to extend that success to U.S. shores, but it faces stiff opposition from at least one influential tech giant.

Apple is whispering in the ear of major record labels, heightening their fears that the ad-based model doesn’t provide enough revenue, and that download sales of music content, which already suck, could get worse still if Spotify is allowed to make landfall here. According to CNET, at least one of those record label’s CEOs, Edgar Bronfman Jr. of Warner Music Group, is already firmly set against Spotify’s way of doing business. Though it’s worth noting that Warner Music Group is traditionally last on board most new technology initiatives.

If Spotify is willing to pay big royalties for content up front, chances are music labels will allow them entry into the market. Rumors are circulating that Spotify will be part of Windows Phone 7 launch coming early next week. If it does come that soon, though, it’ll probably only offer a limited catalogue.

Record industry buzz suggests that Apple is taking the opportunity of Spotify’s looming presence to renew its talks with labels around a streaming music subscription service. Cupertino may be banking on the fact that with Spotify and possibly Google knocking at the door with ad-supported models in hand, a paid subscription service (which guarantees revenue up front) may be much more attractive to the music industry. Apple also offers a built-in device ecosystem that boasts an attractively large prospective subscriber base, owing to strong sales of the iPod, iPhone, iPad and now Apple TV.

Apple’s iTunes chief Eddy Cue is certainly hoping that’s something a tune record execs will find pleasing to the ear, as he’s been on the phone within the past few weeks trying to get talks about subscription plans moving again, according to the New York Post. One thing’s certain: The future of music (and media in general) is in the cloud, and the first company that gets the music industry to finally submit to that idea in a big way will have a huge advantage over its competitors.

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